Continue to save the market?!

Last night, US stocks closed with a slight overall decline, and the three major indices showed weak trends: the Nasdaq fell slightly by 0.05%, the S&P 500 dropped by 0.19%, and the Dow Jones had a slightly larger decline of 0.59%. However, performance in specific tech sub-sectors was decent, with most companies in optical communications and storage sectors seeing gains; SanDisk and Western Digital closed with gains exceeding 2%. Notably, these two stocks surged over 5% intraday before pulling back significantly at the close, showing a clear pattern of rallying then retreating.

Additionally, there is heavy news: US media reported that the US plans to ban cutting-edge Chinese AI models, primarily because our Kimi large model has developed too quickly, causing concern among US counterparts. Simply put, the more their rivals are wary, the more it indicates our AI technology is on the right track, which is a solid long-term benefit for China's domestic AI sector.

Looking at our A-shares, a pile of positive news accumulated over the weekend. Everyone was waiting for the broader market to rebound, but yesterday did not bring a strong counterattack. Instead, market divergence was extreme, resulting in an extreme seesaw 行情 (market movement).

The traditional weight "boss block" collectively surged: coal, electricity, insurance, baijiu (liquor), and banking all strengthened across the board; but the tech sector faced pressure across the board, with AI hardware, storage, chips, and semiconductors continuing to fall sharply, making the ice-and-fire dual trend particularly obvious.

The Shanghai Composite Index rose nearly 1%, while the ChiNext and STAR Market indices turned red directly from their deepest drops of 3% and 4%. But a good-looking index does not mean the market is profitable; the loss effect on individual stocks was explosive. All day, 3,710 individual stocks declined, the median change in individual stock prices fell by over 2.1%, and over 200 stocks hit the daily limit down, making the trading floor very grim.

In recent times, funds have been continuously fleeing tech stocks, and many leveraged funds are also concentrating on taking profits. Coupled with the high weight of tech stocks in the index, this directly dragged the broader market to continue weakening. In the last 20 minutes of yesterday's close, it was only thanks to weighted stocks propping up the market that the situation was barely stabilized; otherwise, the market trend would have looked very ugly.

Luckily, while the market was weak, policy rescue combination punches continued to land, with benefits constantly adding up:

First, a wave of listed company share increases and repurchases arrived, with nearly 30 companies densely disclosing repurchase and increase plans after the bell, bringing real money into the market to boost confidence.

Second, top leaders held meetings in advance to deploy the expansion of the service industry and the construction of "six networks," sending a clear signal of stabilizing the economy and the market.

Third, insurance capital entered the market in large amounts. China Life Asset Management made a net purchase of over 10 billion yuan in the equity market in a single day, firing the first shot of big capital entering the market. Other insurance companies are likely to follow suit, which is also the core reason why high-dividend stocks, consumer white horses, and large financials strengthened yesterday.

Fourth, the fundamentals of the optical module sector continue to improve. The pace of order delivery in the second half of the year is accelerating. The 1.6T optical module is expected to see batch volume growth starting in the third and fourth quarters. As a core sector of the ChiNext board, it is expected to drive the tech sector to stabilize and repair.

Overall, the current market trend is weaker than expected, with repeated oscillations grinding at the bottom. But historical laws are laid out here: the purpose of the continuous landing of policy combination punches is to stabilize the market and return to a slow bull market. Before the goal is achieved, policy support will not stop.

Let's look at the sector themes below:

I. Tech Sector (Only two strong sub-sectors)

Currently, the tech sector as a whole is weak, with only two sub-sectors holding up against the adjustment. One is the switch concept, with a very firm trend. The core logic is the explosion of domestic computing power and super-node construction, driving a significant increase in switch demand, making it the branch of the domestic computing power chain that has taken the lead in emerging trends. The other is the Kimi large model concept. On one hand, the computing power gap is obvious, with computing power leasing stocks rising against the trend and multiple stocks hitting the daily limit up; on the other hand, Kimi shadow stocks hit the daily limit up strongly in the morning session, only diving at the close due to the drag of the broader market, but the thematic logic remains.

II. Low Valuation Hedging Sector (Current Mainstream)

1. Large Finance: Brokerages and insurance are currently the most resilient varieties, without exception. They are basically SSE 50 and CSI 300 weighted targets, the first choice for hedging funds, and are currently in a stage of valuation repair, suitable for hedging and strategic allocation.

2. Non-ferrous Metals Sector: Overall at a low level. Although the index hit a new low, most non-ferrous metal stocks no longer hit new lows, completely suppressed by market sentiment. Copper and rare earth positions are both very low, with copper having stronger earnings stability; the permanent magnet sector adjusted slightly later, may have a small pullback in the short term, and there are still rebound opportunities following the recovery of non-ferrous metals.

3. Chemical Sector: Petrochemicals are also oscillating at a low level, supported by solid earnings. Many targets belong to CSI 300 constituent stocks and are also hedging directions favored by hedging funds.

III. AI+ Sector

After the landing of the Artificial Intelligence Conference, the AI sector continued to adjust in the first half of the year and is expected to stabilize and rebound first in the second half. Domestic large model-related targets showed resilience against declines. Computing power hardware is still grinding at the bottom. After the adjustment ends, focus on domestic chips, advanced packaging, and TOKEN-related underlying targets. Additionally, the three major operators (China Mobile, China Unicom, China Telecom) showed relatively strong trends and are also 常驻 directions for hedging funds.

IV. Robotics Sector

Robotics is currently the only direction where the adjustment exceeded expectations, but it has accelerated to probe the bottom in the short term, with risks fully released. Subsequent catalysts are landing: Tesla's new product mass production at the end of the month and the progress of Unitree Robotics' IPO are expected to drive the restoration of sector sentiment. Currently at a low overall level with earnings support, patience is needed to wait for stabilization. The H2 market is still worth looking forward to.